Investments in other technologies that use AI technologies increased by 18% to $2 billion
Funding for other tech companies using artificial intelligence technologies grew 18% in 2023 compared to last year, attracting nearly $2 billion in private equity and venture capital funding.
According to GlobalData’s technology forecasting model, the most significant AI adoptions in the insurance sector include AI technology for underwriting, user behavior analytics and automatic premium discounting.
The increase in the amount of financing indicates a change in the interaction of the insurance sector with AI. While insurance companies are already using AI for claims settlement and risk assessment, GlobalData has identified a new wave of AI innovation focused on more specialized insurance needs.
Technology is being deployed across the sector to deliver faster and more accurate services, from product development, underwriting and claims to customer service chatbots, risk assessment and quoting. However, what is interesting is that while some large insurance companies are actively investing in AI, many are moving slowly, unsure of how best to deploy these technologies.
Analysts recommend that insurance industry leaders and stakeholders be proactive in establishing partnerships with AI technology companies and taking action when considering potential AI-related acquisitions. AI is particularly transforming the personal and health insurance sectors.
The global AI market is expected to reach $909 billion by 2030, highlighting the growing importance of artificial intelligence in various industries, including and in property and health insurance.
Startups like Prognomiq are developing analytics platforms for early disease detection. On the other hand, startups like Pervisia and Cota are building tools to predict health care costs.
In the field of property insurance, a noticeable surge in innovative activity is also visible both in recognized industry leaders and in young startups. For example, other tech Tractable, which raised $65 million from SoftBank in July 2023, has pioneered a computer vision-based solution to quickly assess damage to vehicles and buildings.
The evolving landscape of the insurance industry sees more than a hundred startups actively developing AI-based solutions, analysts say. Thanks to a proactive approach, leaders in the insurance sector can effectively navigate dynamic market conditions and stay ahead of competitors.
According to Cognizant’s AI survey, only half of insurance executives see AI technologies as “extremely” or “very important” to their company’s success, fewer than any other industry such as financial services, healthcare and production Looking three years ahead, only 36% believe AI will be very important, again lower than any other industry.
The lack of awareness of the importance of Artificial Intelligence is a concern as new market entrants begin to make an impact. Insurtechs use the capabilities of artificial intelligence to present a new range of innovative products. These include instantly adjustable life insurance and on-demand property insurance. Consequently, traditional insurance companies now face unexpected competition. It is imperative that they pick up the pace when it comes to investment and technology adoption, or they will be left behind.